Ever Wonder Why Drug Prices are So High? Here's One Reason...

$1,176 for 2 nights!

Other than mentioning it in my monthly income reports, I rarely talk about the work I do in the meeting industry.  Sometimes I wonder why all this "meeting" is necessary.  Now, don't get me wrong:  I work hard (usually).  The hours are typically long and, being a male in a female-dominated industry, I am usually assigned to do manual labor.

While it's not restricted just to the pharmaceutical industry, the meetings I work are overwhelmingly for major pharma companies.  I'm not allowed to name names, but these are major companies you are very familiar with.

If it's any indicator of how business is done, there's a lot of overspending in the drug industry.  I believe this is one reason why drug prices are so high.

Here's An Example of the Excessive Spending

This week I am working as a Travel Director for a major pharmaceutical company for a 3 day meeting in Orlando.  The company has representatives attending a larger conference and, while there, has reserved a couple of meeting rooms to conduct business.  I am responsible for overseeing one of the two rooms, and a friend of mine is handling the other.

My Hotel Room:  $1,176.75

It's standard practice in this industry to provide lodging for Travel Directors, even if the meeting is taking place in my hometown.  I might be working from 5 in the morning until 10 at night.  There's no time to commute.  But I would be lying if I told you it was needed for this meeting.  Yes, I need a room, but there's no reason I couldn't commute 5-10 minutes from a less-expensive hotel.  I'm working from 8am-4:30pm each day, and there's no possibility of being needed after hours for anything.

My Conference Registration:  $1,555

This one seems completely unnecessary.  Yes, the company is holding meetings while a parallel convention is taking place.  But I won't be attending any of those meetings.  The company I am representing is renting two meeting rooms directly from the hotel, so I won't need a convention badge to be in those rooms.  Sure, it's nice to have a badge - that means I can eat at the meals the larger convention is providing.  But that's the only benefit.  Instead, I could easily eat from one of the resort's many restaurants and expense my meal.

Other Expenses

I am paid a day rate, plus reimbursed for my mileage.  The agency I work for is paid a fee.  The company is over-nighting me a sign for my meeting room (odd, since they knew they needed a sign at least a week before the meeting).  They are also shipping me a special tie to wear for branding purposes.

Now, multiply these costs by two since there are two of us attending.  But wait, there's more!  For my meeting room, the company will be having end of day gatherings to go over everything.  This is entirely internal - no clients to impress.  And since these meetings may go late into the night, a third Travel Director was hired to "relieve" me at 4:30 each day.  There's also an AV tech to manage the rented projector and screen as well as the cost of the room itself.

But Frugal Miser, there must be a lot of work getting done in your meeting room, right?  That's debatable.  I've been told to expect 3-4 meetings over the course of 3 days with no more than 10 people at any meeting (and most likely less than that!).  For this one event, the company is spending over $10,000 to host two small meeting rooms over a 3 day period.

My Frugal Miser - January Expenses: $9,627

I started off 2020 spending about the same as I brought in.  This is about to change.  I'm going to push myself to earn more income this year.  Hopefully expenses will go down since I will be distracted by work.

One of the larger expenses in January was an expected business expense.  I paid the insurance on my three most expensive rental properties.  I normally pay these in February but I am working on earning a Southwest Airlines Companion Pass so I'm pulling forward any expenses I can pay early.  I also prepaid the annual termite bonds for two properties.

In December I averaged $19/day for food.  In January this declined to $15/day (this is for two people) Last January I spent $583 on food, so there was some progress here.  I know it's early, but I'm pleased to have lowered our spending on food last month.  We only implemented two small changes:
First, we bought some frozen entrees at the grocery store that make it easier to prepare a meal at home (versus making a meal totally from scratch).  This is still less expensive than eating out.  Second, we mindfully let the pantry and freezer dwindle down to use some food that we've been ignoring.  This will help us prevent waste.  We also were more careful to use up our leftovers.  There's still plenty I can do to keep our spending down, and I'm hoping we can make this a trend all year.

We spent a few nights in Las Vegas for my birthday.  Several months ago I purchased a 3 night hotel deal for $150 that required us to attend a timeshare presentation.  After not booking it, Hilton offered me an extra 50,000 Hilton Honors points if I would book in January.  In all, for $150 we got a 3 night hotel stay, a $200 rebate towards a future stay at any Hilton-branded property, and 65,000 Hilton Honors points.  It was an incredible deal.  This helped us keep to a very reasonable budget - flights, hotels, rental car, entertainment (a show, gambling, movies) and food averaged less than $200/day for the two of us.



January Business Spending:  $4,297
January Personal Spending:  $5,330

January Expenses:  $9,627

$402 Auto (service, gas, insurance, AAA, etc.)

$149 Bank Fees
$91 Clothing/ Personal Care
$1,312 Fun (vacations movies, gambling, alcohol, concert tickets)

$468 Food

$541 Health and Dental

$1,673 Household/Mortgage Payment/Home Repair

$0 Interest Expense

$0 Miscellaneous

$289 Taxes includes quarterly tax payments
$25 App Jobs Expenses (tolls, car washes, etc.)
$0 Unreimbursed Job Expenses
$15 Reimbursed Job Expenses

$404 Utilities
$3,192 Rental Property Expenses
$1,064 AirBNB Expenses

My Frugal Miser - January Income: $9,580

January is the start of meeting season.  Last month I worked a 5 day show in Orlando, a 4 day job there, and two single day gigs.  These were all decent paying jobs.  I also drove for Uber and Lyft on New Year's Eve and one extra day the first week of January.

January is also the beginning of peak season for our Airbnb.  Last month we had guests 30 of the 31 days.  I intentionally blocked one night when we stayed overnight to work on building a fence and doing some maintenance on the home. 

Next, our long-term rentals.  We still have a vacant unit in Birmingham.  I decided to list that house for sale near the end of the month.  The real estate market is hot right now.  It's better to be selling in this market than buying.

With the extra meeting work along with the week we were away for my birthday, I did fewer delivery routes with Amazon.

January Income: $9,580

$0 Mystery Shopping
$1,995 Meeting Jobs
$732 Gig Apps (Rideshare, Scooter Charging, etc.)
$778 Amazon Deliveries
$3,018 Rental Income
$2,887 Airbnb Income
$69 Interest Income

$100 Other Sources

Investment Accounts Change in Value:  ($1,664)

In a rarity for 2019, my investments declined in value in December.  

My Frugal Miser's Bank, Credit Card and Brokerage New Account Bonuses

Something I want to focus on this year is making money (or saving it!) by opening new bank accounts and credit cards.  This is as close to a free lunch as I can think of.  While this creates a little complexity in keeping up with promotions and managing new accounts, I think it is well worth it for all the free money and miles I am earning.

Cold Hard Cash

Last year I made $1,200 from 3 account transactions.  In a conversation with my broker, he offered me a $500 bonus if I transferred new money to my E*Trade account.  All I had to do was keep it there for 60 days.  Similarly, Discover Bank paid me $200 to open a savings account and I received $500 for opening and meeting the minimum spend requirement on the Wells Fargo Propel card.  I was also offered $500 from Wells Fargo for funding a new savings account.  I completed this task late last year and, after 90 days, I'll have the money in the bank.

I've already got some ideas for 2020.  I received two bank offers last week to open a new account.  Fifth Third Bank is offering $550 if I deposit $20,000 into a new checking account.  Suntrust will give me $300 if I meet their requirements.

Travel Perks

I love to travel; therefore I live to travel.  But it can't get expensive if you aren't careful.  Last year I opened a new Marriott Bonvoy card, receiving 100,000 Bonvoy points after I met the minimum spending requirement.

I'm cranking things up in 2020.  At the end of last year I opened two Southwest Airlines credit cards.  I met the minimum spend this month and am working on earning the last points needed for a companion pass which will be valid through the end of 2021.  I have a bit of spend left to get there, and in that time I'll be hunting for the next new card.

Finally, I plan to put more thought into the promotions offered by hotel loyalty programs.  For example, Choice Hotels has two valuable promotions each year.  After two stays, you earn 8,000 points, which is enough for a free night at some lower-end properties.  During the second promotion they discount $50 retailer gift cards to 8,000 points - a free $50 gift card after just two stays - WOW!  All the loyalty programs have promotions.  By being more thoughtful, I think there are times when it makes sense to book a hotel with a specific brand, even if the rate is higher, because the value of the promotion brings down the ultimate cost.

How are you hacking your finances?